In its first-quarter 2021 results reported April 19, Coca-Cola Co. said demand was unchanged from a year earlier as North America and Western Europe take longer to recover. Global unit case volume in March, however, returned to 2019 levels.
The beverage giant’s first-quarter sales increased 5% to $9.02 billion, beating expectations of $8.6 billion. Organic revenues expanded 6%.
Coke said demand increased every month of the quarter, driven by markets led by China and India where uncertainty tied to the virus has fallen.
“We remain focused on emerging stronger and executing against our growth accelerators during the recovery phase. We are pleased with the progress we are making,” said chairman and chief executive James Quincey.
“We are encouraged by improvements in our business, especially in markets where vaccine availability is increasing and economies are opening up, and we remain confident in our full year guidance,” Quincey added.
First-quarter 2021 highlights
Net revenues grew 5% to $9 billion, and organic revenues (non-GAAP) grew 6%. This was driven by 5% growth in concentrate sales, while price/mix grew 1%.
Operating margin, which included items impacting comparability, was 30.2% versus 27.7% in the prior year’s same quarter. Comparable operating margin (non-GAAP) was 31% versus 30.7% in the prior period.
Earnings per share declined 19% to $0.52, and comparable EPS (non-GAAP) grew 8% to $0.55. Comparable EPS (non-GAAP) growth included the impact of a 2-point currency headwind.
Coca-Cola lost market value share in total nonalcoholic ready-to-drink (NARTD). However, an underlying share gain in both at-home and away-from-home channels was more than offset by negative channel mix due to continued pressure in away-from-home channels.
Cash flow from operations was $1.6 billion, up $1.1 billion versus the prior year’s period, driven by positive business performance, five additional days in the quarter and working capital initiatives.
Click here to see Coca-Cola’s full first-quarter news announcement.
Price increases on the way
On CNBC Monday, Quincey said the company is hedged against any major impact in 2021, but he expects to see higher commodity costs next year.
Coke could raise prices on its drinks to combat the impact of those higher commodity costs, its CEO told CNBC on Monday.
CNBC said Coke joins Kimberly-Clark, J.M. Smucker and other consumer titans in hiking prices.
While the move will help their profit margins, it may come at the expense of cash-strapped consumers who are still struggling from the economic impact of the coronavirus pandemic, the financial news outlet observed.